Just when everyone thought that Bitcoin’s lowest for the year was reached because of the Bitcoin Cash hard fork, Bitcoin hit a low of $4,951.47 on Monday. This represents losing more than 21 percent in just the last seven days. And also, Bitcoin has lost more than 62% of its value this year alone.
Remember that Bitcoin last year was simply trading at around $1,000 during the beginning of the year and reached near $20,000 by mid-December. Because of this regulators had no other choice but to come in.
Bitcoin had been trading at around $6,200 to $6,400 range when Mike Novogratz commented that he thought Bitcoin may have hit bottom. Many believed that the market was maturing and people are holding on to their Bitcoin. It was the time when Bitcoin has lower volatility than tech-related stocks such as Netflix and Amazon. However, this stability and so-called maturity of the market didn’t really last long.
Other cryptocurrencies were also down including Ethereum and Ripple. XRP, which became the second largest cryptocurrency by market capitalization was able to just lose 5% on Monday while Ethereum dropped by 13%. The reason for Ripple’s single digit drop is because of the established relationship that it built with institutions.
Since Ripple announced the xRapid, it has partnered with banks and institutions, Ripple has experienced increased traction from interested parties. In fact, the goal of xRapid was to drop the cost of cross-border transactions.
What is Next for Bitcoin?
There are those who think that the price movement isn’t exactly just caused by the Bitcoin Cash hard fork. Instead, it is also a result of various factors even the tech stocks sell-off that may have precipitated into the crypto market. If you are going to ask eToro Analyst Mati Greenspan, he believes that the “next logical level of support is at $5,000 but if that doesn’t hold, the next logical support level isn’t until $3,500”.
Now, that can be scary for a lot of investors. It only means that there is a chance that it can still go down from here. However, keep in mind that there is an opportunity to accumulate your Bitcoin at this point. Greenspan added that “With all the falling prices lately, this definitely fits the definition of a buyers market”.
There were whales that decided to accumulate their Bitcoin after Bitcoin dropped because of the Bitcoin Cash. Could this mean that you should do the same? Could it be possible that Bitcoin will have another bull run soon?
Regulatory Clarity is Still a Piece of Work
Though regulators were able to make the necessary changes for this year, the US Securities and Exchange Commission isn’t even stopping there. SEC Chairman Jay Clayton mentioned earlier this year that cryptocurrencies that fall under securities will be regulated. The good news is that Bitcoin and Ethereum were considered as commodities.
The US agency started a crackdown on ICOs that are selling unregistered securities. In addition to this, the SEC also targeted crypto exchanges that are listing these tokens. And for this reason, many of the crypto exchanges are careful which token should be included in their listing. Will regulatory clarity invite institutional investors soon? Or is $4K inevitable at this point?